FERC says it won’t ‘change’ the native-load preference, but don’t bet on it.
Bruce W. Radford is editor-in-chief for Public Utilities Fortnightly.
When the Federal Energy Regulatory Commission (FERC) opened wholesale power markets to competition a decade ago in Order No. 888, it codified a system for awarding grid access known as the pro forma Open-Access Transmission Tariff (OATT), founded on physical rights, and on the fiction that electrons travel along a “contract path.”
FERC wanted to erase discrimination in transmission. The way to do it, it thought, was first to identify as the paradigm the transmission service already provided by the traditional, regulated, vertically integrated electric utilities on behalf of their captive ratepayers (“native load”). Then it would adopt rules to prevent those utilities from behaving badly when they offered transmission service to the independent power producers (IPPs) that sought to compete. In short, FERC’s electric policy would echo its successful restructuring of natural-gas pipelines, built on the notion of “comparable” service. In electric markets, as with gas, everybody would get transmission service “comparable” to the (presumed) high quality already enjoyed by utilities and their native load.